By the 1980s, most government agencies, departments, and offices had their own official flag, except the United States Senate. In April 1984, Senator Daniel Inouye of Hawaii proposed that the Senate commission an official flag using the design of the Senate seal. The matter was referred to the Committee on Rules and Administration.

In April 1985, the committee invited eight flag manufacturers to submit designs and cost estimates for an official U.S. Senate flag. After a year and a half of unsuccessful design proposals, Senator Charles Mathias, Jr., of Maryland, chair of the Rules Committee, turned to the Army's Institute of Heraldry. The Institute submitted a design which was approved by the committee, a navy blue banner emblazoned with the Senate seal. In the summer of 1987 a contractor was awarded authority to produce the flags, which became available in March, 1988.

While the flags were in production, regulations were approved stipulating that each senator and each committee could purchase two flags. In addition, Senate officers such as the Secretary of the Senate and Sergeant at Arms could purchase two flags.

Use and sale of the flag is restricted to Senate offices only. Commercial use is prohibited.